Poole v Hargraves Secured Investments [2013] NSWCA 69

The lender obtained possession and consent judgment in relation to properties, now the subject of proposed auctions. The borrowers seeks leave to appeal that decision and a stay of the auctions pending that appeal. 

The court noted there was no dispute as to the right of the lender to sell the properties, only its manner of exercise, namely a “recklessness” as to advertisement, which had not been properly particularised. There was also an allegation of criminality by the lender and its solicitor in relation to its exercise of the power of sale. The Judge held:

Allegations of criminal conduct are serious allegations to be made and would need to be properly particularised. Similarly, if the allegations extend to the conduct of the legal practitioners in relation to the sale, then again they would be very serious allegations and would need to be properly particularised 

The court refused the stay because it took account of the position of the lender and the fact the security would be likely eroded by ongoing delay and that damages were the appropriate remedy in relation to a complaint going not to the lender’s right of sale but its manner of exercise. 

The court also noted the rule in the High Court case of Inglis and another v Commonwealth Trading Bank ofAustralia [1972] HCA 74 that requires a borrower seeking to restrain the exercise of a lender in right of its exercise of the power of sale may to pay the full debt into court. 

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